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Is the time right for Lender’s Online Library? Stress testing Linda Keith CPA, Inc.

In the last post on ‘Fear and Greed’, I suggested you help your business borrowers ‘stress test’ their business. This takes a page from the practice of stress testing your loan portfolio.

Lender’s Online Library
Unless you are new to my website or blog, you already know that this month (if the stars align) we’ll be launching online, on-demand credit training. This has been in the works for over a year, long before the current sputtering of the economic engine of the United States.

How will our plans be impacted?

Possible Upside:
There is a possibility that the Lenders Online Library will be even more popular than we anticipated. Banks and credit unions may be looking for more reputable credit analysis training now that spotting the good loans may be more of a challenge.

Online, on-demand training without the travel and extended time away may be very appealing and more cost effective. Banks and credit unions that are not ‘local’ to my open-enrollment training may become new clients. This could be good!

In the preparation phone call for a recent on-site training on Cash Flow Analysis of Tax Returns, the CEO of a community bank got excited about the reporting function, knowing that the regulators are going to want proof that they are on top of the credit training needs of their lenders.

I had not really focused on that.

Possible Downside:
Training budgets could be slashed as a short-term measure to help the financial institutions offset loan losses and reduced profitability.  Trying something new might not get the traction it would have only six months ago.

Clients that were very excited when we first talked about it may have to delay bringing this into their bank or credit union.

We don’t know.
There is no question that the impact of the development costs on our liquidity has my attention more than it would have. The timing and cost of Lender’s Online Library is a topic at each monthly planning meeting.

We are launching sooner and actually hired a course creator to reduce the roadblock that is me…getting the content into the rich, interactive format I envision. I will not reduce the quality of the training modules. That would come back to bite us and besides, it is not the way I work.

We are looking at all of those costs that creep up and seeing where we can cut back. A new look at our phone service providers will save several hundred a month, for example. Six months ago that would not have been on the radar.

How you can help…
No, I am not suggesting you go over your business borrower’s phone bills with them. But keep your eye out for articles and books that might help them come through the down-turn well. Strike up a conversation when you drop it by.

Follow-up with things that come up in conversation by finding other resources for them. Frankly, the more you understand about business the better you’ll be at business lending. That it helps your borrowers right now is a bonus.

Planning for the rebound
The businesses that do well in a down turn really do well when things pick up. The weaker companies won’t make it and those still standing have market share to pick up.

We are planning for that, too!

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.